Britain cuts VAT to 5% for hospitality sector

LONDON (Reuters): Britain will cut Value-Added Tax (VAT) on spending on hotels, restaurants and tourist attractions, and subsidise temporary discounts on eating out, to boost demand for services hardest hit by the COVID-19 lockdown, finance minister Rishi Sunak said last week.

The standard 20% rate of VAT will be lowered to 5% from next Wednesday until 12 January 2021 for the hospitality and domestic tourism sector at a cost of around four billion pounds, Sunak told parliament during a statement on the outlook for the economy.

Separately, Sunak said the government would subsidise half-price restaurant meals served on Mondays, Tuesdays and Wednesdays in August.

British high-street retailers, as well as pubs and restaurants, have so far seen only around half their customers return as lockdown measures have been partially relaxed in recent days and weeks.